Environmental Due Diligence
Environmental due diligence is critical to protecting land purchasers and lenders from the significant liability associated with environmental contamination. Since the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the law and courts have repeatedly confirmed that current owners, lessors, and lenders are responsible for remediating hazardous environmental conditions, even when they were not responsible for creating the contamination.
In some cases, the cost of remediation can exceed the value of the land. Once discovered, contamination cannot legally be passed to another owner until the existing owner has adequately remediated the situation. However, the same legislation that places the liability upon the current owner also provides protections for buyers and lenders under the “Innocent Landowner Defense.” Under the Innocent Landowner Defense, the current owner avoids responsibility for remediation if they can show that they performed adequate due diligence prior to the purchase.
In most cases, environmental due diligence begins with a Phase I Environmental Site Assessment (Phase I). A Phase I, performed according to the ASTM Standard Practice, that reveals no likely contamination, serves as legal protection under the Innocent Landowner Defense.
In the event that a Phase I reveals likely contamination, purchasers and lenders may proceed to a Phase II, which will determine whether contamination is actually present. While a Phase I indicates whether a site is likely to contain contamination, a Phase II determines whether contamination is actually present. This can provide peace of mind to new property owners and lenders that they will not meet unpleasant and costly surprises.
In addition to contamination, many other environmental factors can impact a property’s suitability for a specific purpose. Many purchasers and lenders choose to invest in additional environmental due diligence to determine the presence of wetlands, ecological resources, or endangered species that may impact the legality of development; audit the health, safety, or regulatory compliance of improvements on the property; test for asbestos, mold, radon, and lead-based paint; identify the presence of environmental liens or land use restrictions; assess the viability and cost of necessary stormwater systems; and determine any stormwater pollution violations.
GLE has been providing environmental due diligence services to clients since 1989. Our team of environmental engineers, scientists, geologists, and construction professionals collaborate to ensure effective and efficient environmental due diligence for buyers and lenders. When you hire GLE, you know your environmental due diligence is in good hands. Contact us today to get started.
